Facebook shares slump to a record low
16 August 2012
Facebook shares hit a record low after a lock-up period that prevented some pre-IPO investors from selling their stakes came to an end.
Shares in the social media website plummeted to low of $19.69 in New York, almost half their initial listing price of $38 which hit a high of $45 on the first day.
Facebook listed on Nasdaq in May 2012, in what was one of the most anticipated flotations in years. The company initially sold 421m shares, but the expiry of a lock up period yesterday meant pre-IPO investors were free to sell a further 271m shares..
Among the largest holders from the lock-up were venture capital firm Accel Partners, Elevation Partners, which is backed by Irish singer Bono, Microsoft and PayPal founder Peter Thiel.
Further lock up periods expire as the year progresses, with an extra 1.44bn shares freed up for sale over the next 9 months, increasing worries that there could be further drop in the share price.
Facebook’s initial share offering was marred by problems, with glitches on US exchange Nasdaq delaying trading for more than 30 minutes.
The shares were down $1.03, or 5pc, at $20.17 in late trading.
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